China -
Different, Difficult, and
Unique
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China is
Different
Even as China enters her third decade of economic
modernization, market intelligence (which Westerners take for granted in
developed countries) is still not widely available here. China continues
to lack a viable database for centralized company information analogous to
"Hoovers.com."(an online database providing business information on 12
million companies). While limited secondary information may be available,
its accuracy tends to be questionable, depending on the reliability of the
market intelligence provider. This is due to two reasons.
(i) Local
firms often collect information without a systematic approach or a
rigorous cross-verification process. Such deficiencies impair the
objectivity of a market analysis.
(ii) Official data provided by
the Chinese government agencies may be less reliable due to an
inconsistent data gathering methodology.
China is
Difficult
Western companies investing in China have had a mixed
experience in the Chinese market. While this experience has proven highly
profitable to some companies, it has also proven otherwise for
many.
The typical reasons for market failure in China include the
following.
(i) Rushing into the market before obtaining reliable
market information to support the investment decision. Some companies have
simply followed this trend of market entry without a clear
risk/opportunity assessment.
(ii) Relying on secondary information,
which is outdated and of questionable quality. Given the rapid business
and regulatory changes in China, timely market intelligence is extremely
important for sound business decision-making.
China is
Unique
The Chinese market has some unique
characteristics:
Extreme fragmentation. For example, the auto component industry and
the pharmaceutical industry contain thousands of manufacturers.
Rapid consolidation and restructuring of state-owned
enterprises.
Being the number one investment destination for foreign direct
investments year after year.
Complexity due to over investment in certain industries. With the
substantial new investments, for example, China has already seen over
capacity in the steel industry.
A unique business culture that emphasizes on "face-to-face"
interaction. This implies identifying the right local partners, which in
turn, requires an extensive and expensive on-the-ground networking with
potential candidates and sifting through skewed or altered information
provided by candidates, until professional assistance can be
obtained.
Diverse language and dialects, country size, and regional cultural
disparities, which make it even more daunting to obtain first-hand
knowledge of this market.
How Frost & Sullivan Helps Clients
in China
Since 1998, Frost & Sullivan has been helping the
world's multinationals to enter and succeed in the Chinese
market.
Today, nearly 100 Frost & Sullivan analysts are
dedicated exclusively to the Chinese market. Our integrated China team
consisting of local professionals applies Frost & Sullivan's rigorous
and proven methodology and leverage a rich business and source network
across China. Thus, Frost & Sullivan is uniquely able to provide the
highest quality of Chinese market research and unbiased growth advice to
its clients.
Click here to e-mail us for more information on our growth
consulting services in
China
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